I'll just jump in here long enough to point out that no one has menetioned the single most important factor in increasing power has always been doing head work. The really powerful inlines all have extensive porting work done on them.
FWIW I milled my head .040 (and bored .040)but was told by the old timer in the machine shop that you could take up .125 off a 235/261 head. That seems excessive to me but he insisted he'd done it many times. Personally I think doing some work on the ports and the manifold did more than anything else with the posssible exception of the HEI to make my 235 come alive.
I'd like to see this thread continue as well and hope to see comments from a lot more of you. This is where we all learn things.